"Earnings are doing pretty well," says Michael Woischneck, a fund manager at Lampe Asset Management in Germany. "But that's something that could change with just one word from a Fed governor. Although no changes are expected, wording at this week's meeting is key."

The US Federal Reserve holds a two-day meeting this week, which ends today.

Banks led gains in the Stoxx Europe 600 Index, which advanced 0.2pc at the close of trading and as much as 0.7pc earlier, after its first three-day drop in a month.

Despite a rally since the February low, investors have kept withdrawing money from the region's equity funds on scepticism about central bank stimulus amid analyst cuts in earnings projections.

They're now waiting for policy decisions from the Federal Reserve and Bank of Japan this week.

In Ireland, the ISEQ Overall Index closed almost 1.3pc higher yesterday at 6,226.15.